By Yakubu LAAH InvestAdvocate

Lagos (INVESTADVOCATE)-The Nigerian interbank rates rose to 11.25 percent on Friday compared with 8.25 percent reported last week after local currency liquidity tightened following purchases of Treasury bills and foreign exchange, a Reuters report quoted traders.

The report says market liquidity dropped to about N260 billion ($1.31 billion) credit by Thursday compared with N400 billion last Friday, Reuters quoted dealers.

According to the report, Nigeria sold a total of N254.96 billion of debt against bids worth N318.58 billion and the secured Open Buy Back (OBB) rose to around 11 percent from 8 percent last week.

The secured fund was two (2) percentage points short of the central bank’s 13 percent benchmark interest rate. Overnight placement stood at 11.5 percent against 8.5 percent last week.

“We anticipate a slight increase in the cost of borrowing among banks next week because of plans to debit banks’ account for cash reserves requirement (CRR) on Thursday and cash outflow to bond issuance,” the report quoted a dealer as saying.

The CBN has mandated banks to set aside 75 percent of public sector and 15 percent of private sector deposits in liquid cash in their account with it and debit their accounts twice every month to enforce this requirement.

Nigeria plans to raise N95 billion by selling sovereign bonds with maturities ranging between five (5) and 20 years on March 11.